Toyota blames costs, not UAW, for NUMMI pullout

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Toyota blames costs, not UAW, for NUMMI pullout Hans Greimel Automotive News August 28, 2009 - 9:52 am ET
TOKYO -- Toyota Motor Corp. says it plans to shut its California
factory because of high labor and logistics costs, not because the UAW represents workers there.
"The UAW presence does not have a direct impact on the decision," Executive Vice President Atsushi Niimi said in conference call today after the automaker said it will end production at New United Motor Manufacturing Inc. in Fremont, Calif., on March 31, 2010. The plant builds the Toyota Corolla and Tacoma.
Niimi also said Toyota will seek to boost Corolla output in North America. NUMMI's closure leaves Toyota with only one North American plant, in Cambridge, Ontario, that builds the Corolla.
"California is a high-cost location," Niimi said.
He said California's higher-than-average cost of living, not the union, dictates higher labor costs there. Expenses are driven higher by the huge distance between the NUMMI plant and the Midwest, where most of Toyota's suppliers have set up factories.
NUMMI is Toyota's only UAW-represented auto plant, with a union work force of more than 4,000 people.
NUMMI's workers may apply for jobs at other Toyota plants but won't be given special preference, Niimi said. This is the first closure of an American plant in Toyota's history.
Wanted: More Corollas
Toyota will shift production of Tacoma pickups from NUMMI to its truck factory in San Antonio. NUMMI's output of Corollas will be replaced by cars from Canada and Japan to meet near-term demand.
Niimi could not say how many Corollas would be shipped from Japan rather than sourced from Canada. But Toyota wants more Corolla production in North America as soon as possible, he said.
The NUMMI closure lops off about 400,000 units from Toyota's total global capacity of 10 million vehicles, Niimi said. Trimming capacity is a top priority for Toyota, which has about 3 million units more than it currently needs. The NUMMI capacity figure includes GM's portion, Niimi said.
Toyota's North American production capacity will drop to 1.6 million from 2 million.
Earlier this week, Toyota said it will shut Line 2 at its Takaoka plant in Japan to soak up another 220,000 units of overcapacity.
UAW chides Toyota
Separately, the UAW's top leader chided Toyota for closing the plant just after benefiting from the government's cash-for-clunkers program.
In a statement released yesterday, UAW President Ron Gettelfinger said, "It's unfortunate the company chose to close a U.S. facility after benefiting so greatly from the federal cash-for-clunkers program, which is funded by U.S. taxpayers."
Toyota led all automakers in the number of vehicles sold during the cash-for-clunker stimulus program.
Niimi, who heads global production and North American operations at Toyota, said the future of the NUMMI factory hinges on ongoing negotiations with General Motors Co., its partner in the venture. GM decided to pull out of NUMMI as part of its reorganization while in Chapter 11 bankruptcy.
Niimi said GM and Toyota are still negotiating how to absorb the costs of shuttering NUMMI.
You can reach Hans Greimel at snipped-for-privacy@crain.com.
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That last line is too factual, so it doesn't feed into the need to bash unions. Simpletons need someone to bash because facts are boring.
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With politicians, other thieves, and simpletons, the truth is often obscured by smoke and mirrors.
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GM announced the pullout early on in the bankruptcy, as is mentioned. That had to be a factor.
But the point is very valid that California is a highly expensive venue for business.
Maybe the company should have never been there. There are plenty of states, Texas included, that would like to have more industry and where the cost of doing business in much much cheaper.
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wrote in message

Maybe they originally chose California to be as close as possible to the shipping point for any parts made in Japan. Or maybe it was a cultural decision: Locate in a liberal state where they felt they were less likely to have to deal with people who believed "Buy American cars even though they're garbage." By now, most of those people have hopefully been sidelined to nursing homes and cemeteries, so it's safer to locate in conservative states know that they can find workers who don't hate the product they're building.
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The NUMMI plant was originally a GM plant (mouthballed in 1982). When GM and Toyota decide to work together, GM turned the plant over the the joint venture and let Toyota install the management. At the time both were hoping to learn the other's buisness. It was Toyotas first attempt at building vehicles in the US and GM was hoping to learn how Toyota did things. I'd say things worked out better for Toyota than GM. The plant was a Union Shop because it was transferred into the joint venture from GM and as a former GM plant it had always been a Union Shop. I suspect the first thing Toyota learned was that they'd prefer to avoid the UAW. I suspect GM had already figured that out.
See http://en.wikipedia.org/wiki/NUMMI
Ed
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not all of us are in nursing homes yet, but i think we have more sense to post anything like this just remember those folks are the ones that built this country up from the 1880s to the 1960 its the generation after that is finding ways to tear it down. Ameria was a respected county and the wish of many to come here. Since the 60s we have lost almost all the manufacturing jobs in this country Steel, Textile, electronics, appliances, and much of the auto industry. the only thing we export is raw materianl lumber, coal, oil, medical tech etc.
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I don't care WHO "those folks" were. It bears no relationship to the FACT that American car makers decided at some point that it was OK to churn out garbage. If you disagree, then you've somehow managed to ignore what's happened to American car makers recently.
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I don't agree that American car makers decided to turn out junk any more than Japanese or European car makers decided to turn out junk. The absolute worst car I owned was a Toyota. The worst cars owned by family members have all been foreign models. Toyota has shipped some absolute crap in the past, yet people tend to forget that and focus on the bad old Chevy that a freind of uncle Joe's owned 15 years ago. At this moment, myself and those closest to me own 4 Toyotas, 5 Fords, 1 Mazda, and a Honda. They are all fine vehicles. None have needed much maintenance (and none out of warranty). If I was rating them, I'd go from best to worst - Ford Fusion, Ford F150, Mazda 3, Ford Freestyle, Honda Civic, RAV4, RAV4, RAV4, Toyota 4Runner, Ford Ranger, Ford Mustang.
I mostly dock the RAV4s becasue for such large vehicles they are incredibly uncomfortable but they do get really good gas mileage. The Mazda3 has more front seat room (and it isn't even close) and it gets even better gas mileage. The Fusion has been a wonderful car. As for the worst car on my list, there is nothign really wrong with the Mustang, I just don't like the ergonomcis (although it has far more front seat room than the RAV4s or the 4Runner). The Ranger is old and it is slow for something with a 4.0 L engine. However, it it has been dead solid reliable for the last 10+ years. The Civic is hard to get into and had been recalled a couple of times but is not bad either. The Freestyle is fine, I just don't like the way the front wheel wells intrudes into the passenger space. It is almost 5 years old and has never seen the inside of a shop except for oil changes. The 4Runner is OK, but it is clearly the crudest design of current mid-sized SUVs and costs far more than a similarly equipped (and superior in most ways) Ford Explorer. However the SO prefers Toyotas and neither cost nor perforance was a consideration in the purchase. She never even looked at any of the better alternatives, or even negotiated very hard on price (but then the Toyota dealer was practically begging for someone to take it off their hands - in genral they are having a hard time moving them given the high cost and mediocre specs).
I think any fair apprasal would concede there is very little difference in average quality between domestic and foreign brands. For sure individual models vary, but I would never claim that either has a clear edge in every case.
Ed
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My experience was the direct opposite of yours. From 1975 through 1982, I had nothing but hideous luck with Fords & GM cars. Please tell me what factor (advertising, faith, etc) would make someone try again with products which sucked in the past. I've had things go wrong with foreign cars, but never anything so stupid that it could only have been caused by complete incompetence in the design department.
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My luck was about the same as yours, but our last GM product, a Buick LeSabre, was bought in 1998.
We normally tend to hold onto our cars longer than the 4-5 years that is now somewhat typical.
Every GM product developed serious problems over the longer term, and some of them were a constant drain on the finances due to niggling little repairs. Now, I normally did most of the work on our cars at that time, so the repair cost was mitigated to some degree. But, I do not now nor did I do tranny overhauls at the time.
I used to say that I would rather push a GM than ride in a Ford. That smirk was wiped off my face when I DID have to push them so often.
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So are you comapring domestic from the 70's with foreign cars from the 90's? I can attest from personal experience that Japanese cars from the 70's were not all that great. I had a mid-70's 289Z than I loved, but it was very far from trouble free. And my Sisters late 70's Accord was a rust bucket waiting to kill her. But at least it had a built in speed warning - once you got past 55 mph, the front doors would flex out and the wind noise would discourage you from going faster. At the same time my parents had big old Fords that literally never failed, were roomy, had decent rides, but sucked gas like we owned an oil company. I'd say in my life, I've had only one bad domestic car, a 1981 Plymouth Reliant K. And it actuall drove great, had good interior room, got decent gas mileage. If only it had stayed out of the shop, it would have been a good car. But even then it was infinitely better than the early 80's Toyota Cressida we owned. The Cressida was even less relaible than the K Car, had horrible paint, crappy plastic, bad egronomics, drove like an old worn out truck,and sucked gas like one to. It had to be the most over priced POS I've ever had to put up with. BUT..the ex-wife loved it, because it was Toyota and, at least in her mind, that meant no matter how often it ws in the shop, it was still better than a Chevy...even if the Chevy was never in the shop.
Ed
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Of course, since the last American cars I owned were from that earlier era. How would you suggest I discover that they'd gotten better? Buy one and find out the hard way? In 2004, I took a full size Dodge sedan (Intrepid?) for a test drive. A panel fell off the underside of the dashboard when I went over a small bump. Guess how inclined I was to look further at American cars after that.
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If you haven't owned a Ford or GM since 1982, how can you claim newer models are garbage? I can *kind of* understand why you would be hesitant to purchase a brand new one, based on your previous experience, but seriously.
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You just answered your own question. You have to own one to find out. I had some brief experience with a used 92 Taurus, and that car provided a few reminders of why I was gun-shy. A fusible link in the engine compartment corroded into dust, disabling the starter motor. My mechanic showed me the replacement part. It included no form of insulation against the elements. He created his own using several layers of heat shrink tubing.
1973-4 (dont' recall) Pinto wagon: The manual shifter was held onto the tranny by a threaded plastic ring. One day, I downshifted and found the shifter was suddenly attached to nothing but the boot. The idiots had located the exhaust pipe close enough to melt the plastic ring. The dealer claimed they'd never heard of this happening and they made a big stink about fixing it. They fixed it under duress. It happened again, and a machinist friend offered to make a retainer ring out of metal. We discovered why the dealer hesitated to fix the problem. To remove the console boot, we had to remove the console. To do that, we had to remove the carpet, and THAT required removing the seats.
No thanks.
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You buy whatever it is you want. All I am saying is you are foolish to compare vehicles built in 1982 with vehicles built today. If I were to compare my GM's from the 90's and 2000's to Toyota's from the 70's and 80's, that would give me further evidence that I would never want to own a Toyo. However, like I said, that makes little sense.
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Like I said, the only way to find out if newer American cars are better than before is to buy one, and that experiment would cost me 20-30K. I don't trust anyone else's evaluations, since everyone has different expectations. For instance, my brother in law still thinks it was normal for the transmissions to go bad at 65K miles in two of his GM cars. I find that a bit odd. Who can say if maintenance was a contributing factor, or if the trannys were just plain trash?
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Can't prove it to me, I have a 1970 Pinto that has nearly 300,000 miles on the odometer and it has the original tranny and shift leaver.
"Joe$#irForBrains"

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If you were someone else, I might believe you. But you're not.

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wrote:

He's an old guy with old ways of thought. When he's gone a new generation of car owners will be ascendant. Sort of reminds me of those who remember Pearl Harbor as an excuse to be anti-Jap. Just a generation later, but the same way of thinking. Tells the kids, "Back in '82, when you were just a twinkle in your dad's eye, I had an altercation with a Chevy Citation......" So sad.
--Vic
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